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Notes to and forming part of the financial statements for the period ended 30 June 2020

1. Summary of significant accounting policies

The museum is structured to meet a single outcome:

Outcome 1 – Increased knowledge, appreciation and enjoyment of Australia’s maritime heritage by managing the National Maritime Collection (NMC) and staging programs, exhibitions and events.

The continued existence of the museum in its present form and with its present programmes is dependent on Government policy and on continuing funding by Parliament for the museum's administration and programs.

Basis of preparation of the financial statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

The financial statements and notes have been prepared in accordance with:

  • Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and
  • Australian Accounting Standards and Interpretations – Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars. Values are rounded to the nearest $1,000, except key management personnel remuneration (Note 11) which is rounded to the nearest dollar.

Consolidation and associated company

The financial statements show information for the economic entity only; this reflects the consolidated results for the parent entity, the Australian National Maritime Museum, and its controlled entity, the Australian National Maritime Museum Foundation (the foundation). The results of the parent entity do not differ materially from the economic entity and have therefore not been separately disclosed. The foundation is a company limited by guarantee (see Note 14).

The accounting policies of the foundation are consistent with those of the museum and its assets, liabilities and results have been consolidated with the parent entity accounts in accordance with Accounting Standards. All internal transactions and balances have been eliminated on consolidation.

New Accounting Standards

Future Australian Accounting Standard Requirements

All new, revised and amended standards and interpretations that were issued prior to the sign-off date and are applicable to the current reporting period:

  • did not have a material impact on the museum’s financial statements; and
  • are not expected to have a material impact on the museum’s future financial statements.

Standard/ Interpretation

Nature of change in accounting policy, transitional provisions, and adjustment to financial statements

AASB 15 Revenue from Contracts with Customers / AASB 2016-8

Amendments to Australian Accounting

Standards – Australian Implementation Guidance for Not-for-Profit Entities and AASB 1058 Income of Not-For-Profit Entities

AASB 15, AASB 2016-8 and AASB 1058 became effective 1 July

2019.

AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including AASB 118 Revenue, AASB 111 Construction Contracts and Interpretation 13 Customer Loyalty Programmes. The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the museum expects to be entitled in exchange for those goods or services.

AASB 1058 is relevant in circumstances where AASB 15 does not apply. AASB 1058 replaces most of the not-for-profit (NFP) provisions of AASB 1004 Contributions and applies to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the museum to further its objectives, and where volunteer services are received.

The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements.

AASB 16 Leases

AASB 16 became effective on 1 July 2019.

This new standard has replaced AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease, Interpretation 115 Operating Leases—Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

AASB 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. AASB 16 substantially carries forward the lessor accounting in AASB 117, with the distinction between operating leases and finance leases being retained. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements.

Application of AASB 15 Revenue from Contracts with Customers / AASB 1058 Income of Not-For-Profit Entities

The museum adopted AASB 15 and AASB 1058 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented is not restated, that is, it is presented as previously reported under the various applicable AASBs and related interpretations.

Under the new income recognition model the museum shall first determine whether an enforceable agreement exists and whether the promises to transfer goods or services to the customer are ‘sufficiently specific’. If an enforceable agreement exists and the promises are ‘sufficiently specific’ (to a transaction or part of a transaction), the museum applies the general AASB 15 principles to determine the appropriate revenue recognition. If these criteria are not met, the museum shall consider whether AASB 1058 applies.

In relation to AASB 15, the museum elected to apply the new standard to all new and uncompleted contracts from the date of initial application. The museum is required to aggregate the effect of all of the contract modifications that occur before the date of initial application.

In terms of AASB 1058, the museum is required to recognise volunteer services at fair value if those services would have been purchased if not provided voluntarily, and the fair value of those services can be measured reliably.

The museum receives revenue from a number of different sources that relate to AASB 15. These sources include activities such as admissions revenue, retail revenue and venue hire revenue. The museum has performed an assessment on the contracts that are revenue – driven. The museum is satisfied that revenue is recognised in line with the performance of contractual obligations. As a result, there are not any material transition impacts to AASB 15 Revenue from Contracts with Customers and/or AASB 1058 Income for Not-for-Profit Entities.

Application of AASB 16 Leases

The museum adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019.

Accordingly, the comparative information presented is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.

The museum elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under AASB 117 were not reassessed. The definition of a lease under AASB 16 was applied only to contracts entered into or changed on or after 1 July 2019.

The Museum previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under AASB 16, the museum recognises right-of-use (ROU) assets and lease liabilities for most leases. However, the museum has elected not to recognise ROU assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of 12 months or less.

On adoption of AASB 16, the museum reclassified long-term peppercorn finance leases over land and building for the main exhibition building and Wharf 7 (a combination of office, exhibition and storage spaces) from land and building to ROU assets. The impact on transition is summarised below:

Departmental

1 July 2020

Right-of-use assets – property, plant and equipment

155,727

In accordance with the transitional arrangements under AASB 16, the ROU assets previously classified as finance leases under AASB 117 were initially recognised on AASB 16 transition date at their carrying amount under AASB 117 immediately prior to transition. There is no corresponding lease liability in relation to these assets.

Impacts of COVID-19 on preparation of statements

COVID-19 has created significant uncertainty about future outcomes. The use of estimates and judgements in the preparation of these financial statements has been reviewed in light of the circumstances of COVID-19 at the end of, and after, the reporting date. Additional disclosures are provided at the relevant notes as appropriate (see notes 2, 3D, 4C, 4D, 5B and 6A).

Transactions by the Government as owner

Equity Injections

Amounts appropriated which are designated as ‘equity injections’ for the year, which include Collection Development Acquisition Budget (CDAB), are recognised directly in Contributed Equity in that year (2020: $3,153; 2019: $7,821).

Taxation

The museum is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and Goods and Services Tax (GST).

Breach of Section 83 of the Constitution

There were no breaches of Section 83 of the Constitution by the museum and its controlled entity for the reporting period.

2. Events after the reporting period

There were no events after the reporting period, including relating to the impacts of COVID-19, that provide evidence of conditions that existed as at 30 June 2020 or are indicative of conditions that arose after the date that require adjustment to, or disclosure in, these financial statements.

3. Expenses

2020

$'000

2019

$'000

3A: Employee benefits

Wages and salaries

8,421

8,204

Superannuation

  • Defined contribution plans

1,358

1,311

  • Defined benefit plans

547

564

Leave and other entitlements

1,334

1,605

Volunteer resources, free of charge

1,436

1,827

Workers Compensation

282

263

Labour Hire

2,981

2,280

Other employee expenses

328

94

Total employee benefits

16,687

16,148

Accounting Policy

Accounting policies for employee related expenses is contained in Note 9A.

3B: Suppliers

2020

$'000

2019

$'000

Goods and services supplied or rendered

Cost of goods sold

401

490

Brand and marketing

2,082

2,428

Collections

238

73

Contractors

4,262

4,415

Consultants

1,337

1,600

Utilities

887

975

Functions, exhibition, events

1,997

1,835

Staff related expenses

1,170

1,110

Technology and telecommunication

728

721

Vessels

340

413

Other

1,396

1,283

Total goods and services supplied or rendered

14,838

15,343

Goods supplied

2,051

2,153

Services rendered

12,787

13,190

Total goods and services supplied or rendered

14,838

15,343

Other suppliers

Operating lease rentals1

0

132

Short-term leases

152

0

Total other suppliers

152

132

Total suppliers

14,990

15,475

1 The Museum has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

The above lease disclosures should be read in conjunction with notes 4C, 6A and 8.

Accounting Policy

Short-term leases and leases of low-value assets

The museum has elected not to recognise right-of-use assets and lease liabilities for short- term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). The museum recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

2020

$'000

2019

$'000

3C: Grants

Non-profit institutions

120

97

Total grants

120

97

3D: Impairment loss on financial instruments

2020

$'000

2019

$'000

Impairment on trade and other receivables

65

0

Total impairment on financial instruments

65

0

3E: Write-down and impairment of other assets

2020

$'000

2019

$'000

Write-down on infrastructure, plant and equipment

108

449

Impairment on intangible assets

173

170

Total write-down and impairment of other assets

281

619

3F: Losses from asset sales

2020

$'000

2019

$'000

Loss from sale of property, plant and equipment

1

8

Total losses from asset sales

1

8

4. Income

OWN-SOURCE REVENUE

2020

$'000

2019

$'000

4A: Revenue from contracts with customers

Sale of goods

866

1,025

Rendering of services

7,982

8,262

Total revenue from contracts with customers

8,848

9,287

Disaggregation of revenue from contracts with customers

Revenue from contracts with customers has been disaggregated into categories based on

the timing of transfer of goods and services to the customer, to enable users of financial statements to understand the nature, amount, timing and uncertainty of income and cash

flows.

2020

$'000

2019

$'000

Major product / service line:

Chartering/hiring fees and berth sales

2,083

1,517

Public admissions, memberships and programs

4,339

4,456

Sale of inventory

865

1,024

Venues and events

1,543

2,282

Other

18

8

8,848

9,287

Timing of transfer of goods and services:

Over time

1,887

1,400

Point in time

6,961

7,887

8,848

9,287

Revenue from the sale of goods is recognised when control has been transferred to the buyer.

The museum receives revenue from a number of different activities, which relate to AASB 15, as they involve a sufficiently specific performance obligation with the customer. These include admissions, retail and other related revenue from visitors to the museum,

and revenue from the hire of museum facilities for events and functions. In most instances for revenue of this type, the performance obligation is satisfied at a point in time, namely when the customer consumes the service (i.e. visits the museum, or the event/function is held).

Where the obligation occurs over time, for example annual memberships programs, the revenue is recognised as the customer gains control of the service over the period of the membership.

The transaction price is the total amount of consideration to which the museum expects to be entitled in exchange for transferring promised goods or services to a customer.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

4B: Interest

2020

$'000

2019

$'000

Deposits

378

898

Total interest

378

898

Accounting Policy

Interest revenue is recognised using the effective interest method.

2020

$'000

2019

$'000

4C: Rental income

Operating lease

Lease income

2,692

2,651

Total rental income

2,692

2,651

Operating Leases

In the capacity as lessor, the museum leases space in Wharf 7, its wharves and its main museum on a commercial basis.

Maturity analysis of operating lease income receivables

2020

$'000

Within 1 year

2,329

One to two years

2,047

Two to three years

1,248

Total undiscounted lease payments receivable

5,624

The museum has applied the National Cabinet Mandatory Code of Conduct SME Commercial Leasing Principles During COVID-19 in respect of its eligible tenants. Lease income in 2020 and operating lease income receivables within 1 year have been reduced accordingly.

The above lease disclosures should be read in conjunction with the accompanying notes 3B, 6A and 8.

4D: Other revenue

2020

$'000

2019

$'000

Donations

550

181

Grants

3,461

1,704

Resources received free of charge

1,436

1,827

Sponsorship

993

1,902

Other

1,210

12

Total other revenue

7,650

5,626

The museum received insurance proceeds from its insurer of $1.2 million, for business interruption caused by COVID-19 for the period 24 March 2020 to 31 May 2020, during operation of the NSW Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020.

Accounting Policy

Resources received free of charge are recognised as revenue when and only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Cash donations with no commitments are recognised when received.

Grants revenue is recognised based on an assessment of the terms and obligations of the individual grant agreement.

2020

$'000

2019

$'000

4E: Other gains

Donated assets - heritage and cultural

113

486

Total other gains

113

486

Accounting policy

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements.

Gains from disposal of assets are recognised when control of the asset has passed to the buyer.

REVENUE FROM GOVERNMENT

2020

$'000

2019

$'000

4F: Revenue from Government

Corporate Commonwealth Entity payments from the Department of Infrastructure, Transport, Regional Development and Communication

21,217

21,415

Total revenue from Government

21,217

21,415

Accounting Policy

Funding received or receivable from non-corporate Commonwealth entities is recognised as Revenue from Government by the museum unless the funding is in the nature of an equity injection or a loan.

5. Financial assets

5A: Cash and cash equivalents

2020

$'000

2019

$'000

Cash on hand or on deposit

24,058

25,357

Total cash and cash equivalents

24,058

25,357

2020

$'000

2019

$'000

5B: Trade and other receivables

Goods and services

Goods and services

304

936

Total receivables for goods and services

304

936

Other receivables:

GST receivable from the ATO

142

209

Interest

16

100

Other

1,008

667

Insurance receivable

1,210

0

Total other receivables

2,376

976

Total trade and other receivables (gross)

2,680

1,912

Less impairment loss allowance

-100

-35

Total trade and other receivables (net)

2,580

1,877

Reconciliation of the Impairment Allowance

Movements in relation to 2020

Goods & services

$'000

Total

$'000

As at 1 July 2019

35

35

Increase/(Decrease) recognised in net cost of services

65

65

Total as at 30 June 2020

100

100

Accounting Policy

Financial assets

The museum classifies all its financial assets as financial assets measured at amortised cost.

Trade receivables, loans and other receivables

Trade receivables, loans and other receivables that are held for the purpose of collecting the contractual cash flows where the cash flows are soley payments of principle and interest (SPPI), and that are not provided at below-market interest rates, are subsequently measured at amortised cost using the effective interest method adjusted for any impairment loss allowance.

The impact of COVID-19 on recovery of trade receivables, loans and other receivables has been assessed at the reporting date. The impairment loss allowance has been increased in line with the assessment.

The museum currently has no loans.

6. Non-financial assets

Land

$’000

Buildings & Wharves

$’000

Total Land, Buildings &

Wharves1

$’000

Infrastructure, Plant & Equipment

$’000

Heritage & Cultural

Assets $’000

Intangibles

$’000

Total

$’000

As at 1 July 2019

Gross book value

14,894

78,720

15,960

109,574

Accumulated depreciation, amortisation and impairment

-5,482

-4,964

-10,859

-21,305

Total as at 1 July 2019

9,412

73,756

5,101

88,269

Recognition of right of use asset on initial application of AASB 16

52,380

103,347

155,727

155,727

Adjusted total as at 1 July 2019

52,380

103,347

155,727

9,412

73,756

5,101

243,996

Additions

By cost including work in progress

2,287

2,027

1,199

5,513

Right-of-use assets

4,761

4,761

4,761

In-kind at fair value

113

113

Revaluations

Revaluations and impairments recognised in other comprehensive

income for right-of-use assets

Impairments on right-of-use assets recognised in net cost of services

Depreciation and amortisation

-2,812

-2,981

-1,437

-7,230

Depreciation on right-of-use assets

-3,651

-3,651

-3,651

Disposals

-133

-133

Disposals depreciation

88

88

Write-down and impairment of asset

-109

-173

-282

Other movements of right-of-use assets

Transfers

Total as at 30 June 2020

52,380

104,459

156,839

8,778

72,870

4,690

243,178

Total as at 30 June 2020 represented by

Gross book value

52,380

108,108

160,490

17,072

80,727

16,986

275,275

Accumulated depreciation/amortisation

-3,651

-3,651

-8,294

-7,857

-12,296

-32,097

Total as at 30 June 2020

52,380

104,459

156,839

8,778

72,870

4,690

243,178

Carrying amount of right-of-use assets

52,380

104,459

156,839

156,839

1 Under AASB16, the museum is required to meet the disclosure requirements of AASB116 for items of property, plant and equipment subject to an operating lease, and in doing so disaggregate items of property, plant and equipment subject to an operating lease from items of property, plant and equipment not subject to an operating lease.

The asset class, Total Land, Building & Wharves consists of the museum’s site, main exhibition building, wharves, and the Wharf 7 building, which are primarily held and used by the museum.

The museum has four separate commercial leasing arrangements with tenants for areas of the museum’s site, main exhibition building, wharves, and the Wharf 7 building, and these assets are therefore each partially subject to an operating lease. To disaggregate each of these assets between primarily held and used by the museum and subject to an operating lease would result in an arbitrary allocation of values between the two categories. As the assets are primiarly held and used by the museum, they are included in the tabulated disclosure in 6A and disaggregation has not occurred.

Land, buildings and other property, plant and equipment that met the definition of a heritage and cultural item were disclosed in the Heritage and Cultural Assets class.

All revaluations of non-financial assets were conducted in accordance with the revaluation policy stated in this note. The last revaluation took place at 30 June 2017, with a desktop valuation undertaken at 30 June 2020 during which no material changes in fair value were identified.

The impact of COVID-19 was considered at the time the desktop valuation was undertaken, and again prior to completion of these statements, including in relation to rental returns on similar land holdings to those of the museum, changes to building values (replacement costs and useful life) and changes in active markets for heritage and cultural items. The assessment concluded that the impacts did not result in a material change in fair value at 30 June 2020. Asset carrying values will continue to be reviewed as further information about the impacts of COVID-19 (if any) become available.

Indications of impairments were identified for a software asset (Intangibles) and a discontinued capital project (Building & Wharves), resulting in loss from impairment and write downs of assets of $281 (2019: $619). An item of heritage and cultural assets with a carrying value of $45 was sold during the year resulting in a loss (2019: $8) – see Notes 3C & 3D.

The museum has contractual commitments for acquisitions of property, plant, equipment and intangibles of $2,739 (2019: $2,462). Total contractual commitments are due for acquisitions of property, plant, equipment and intangibles are due within 1 year.

Accounting Policy

Acquisition of assets

Assets are recorded at cost on acquisition except as otherwise stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition.

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located.

Lease Right of Use (ROU) Assets

Leased ROU assets are capitalised at the commencement date of the lease and comprise the initial lease liability amount, plus initial direct costs incurred when entering into the lease, less any lease incentives received. These assets are accounted for by Commonwealth lessees as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned.

Following initial application, an impairment review is undertaken for any right of use lease asset that shows indicators of impairment and an impairment loss is recognised against any right of use lease asset that is impaired. Lease ROU assets continue to be measured at cost after initial recognition in Commonwealth agency, GGS and Whole of Government financial statements.

Revaluations

Following initial recognition at cost, property, plant and equipment (excluding ROU assets) are carried at fair value (or an amount not materially different from fair value) less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the operating results. Revaluation decrements for a class of assets are recognised directly in the operating results except to the extent they reverse a previous revaluation increment for that class.

When an item of property, plant and equipment is revalued, any accumulated depreciation as at the revaluation date is treated in one of the following ways:

  1. restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount; or
  2. eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount of the asset.

Non-financial assets were valued using Level 2 and Level 3 unobservable inputs.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the museum using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2020

2019

Wharves

5–10 years

5–10 years

Buildings

5–60 years

5–60 years

Property, Plant & Equipment

3–50 years

3–50 years

Heritage & Cultural

3-400 years

3-400 years

Planned expenditure on the preservation of museum buildings is depreciated over the Strategic Asset Management Plan (SAMP) cycle of 10 years.

The depreciation rates for ROU assets are based on the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term.

Impairment

All assets were assessed for impairment at 30 June 2020. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily

dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the museum were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Heritage and Cultural Assets

The museum collects, manages and displays heritage and cultural assets relating to Australia’s maritime history. These assets are classified as heritage and cultural assets as they are primarily used for purposes that relate to their cultural significance.

Heritage and cultural assets are valued on a continuing basis by external valuers and by the museum’s curators based on their potential market value.

The museum has adopted appropriate curatorial and preservation policies for the heritage and cultural assets, which are depreciated according to the assessment of useful lives.

Planned expenditure on the conservation and preservation of heritage and cultural assets is depreciated over the current planning period.

Intangibles

The museum’s intangibles comprise internally developed software for internal use and digital content for external use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software and digital content are amortised on a straight-line basis over its anticipated useful life. The useful lives of the museum's software are 3 to 20 years (2019: 3 to 20 years).

All software assets were assessed for indications of impairment as at 30 June 2020.

Significant estimates and judgements

The fair value of land has been determined by an independent valuer, with reference to the market value of similar properties, which is then discounted to recognise the restricted permitted use of the land under the terms of the lease. The significant unobservable inputs used in the fair value measurement is the subjective discount factor to reflect restricted use provisions.

The fair value of the buildings, which are purpose built, has been determined by an independent valuer at depreciable replacement cost. The last revaluation took place at 30 June 2017, with a desktop valuation undertaken by an independent valuer at 30 June 2020 during which no material changes in fair value were identified. The significant unobservable inputs used in the fair value measurement is the replacement cost of purpose-built buildings.

The fair value of the wharves has been determined by an independent valuer using an income capitalisation approach, whereby a yield is applied to the potential income earning capacity of the underlying asset. The significant unobservable inputs used in the fair value measurement is the estimated market yields.

The fair value of the vessels (a sub-set of heritage and cultural assets) has been determined by an independent valuer, using either the:

  • current replacement cost less accumulated depreciation (in the case of the Endeavour) – the significant unobservable input used in fair value measurement is the cost of rebuilding the vessel; or
  • cost approach (in the case of all other vessels in the museum’s fleet), taking into account both the residual (scrap) value of the vessel and indexed costs of planned maintenance – the significant unobservable inputs used in fair value measurement include the scrap value and required condition of the vessels.

The fair value of heritage and cultural assets (excluding vessels) has been determined by either an independent valuer or museum curators at the market value of similar heritage and cultural assets. The last revaluation took place at 30 June 2017, with a desktop valuation undertaken by an independent valuer at 30 June 2020 during which no material changes in fair value were identified.The significant unobservable inputs used in the fair value measurement are the market values of the individually valued items (those items assessed at over $10,000) and the sample price of items valued by way of sampling.

Significant differences in the above mentioned unobservable inputs would result in a significantly different fair value measurement.

2020

$'000

2019

$'000

6B: Inventories

Inventories held for sale

403

300

Total inventories

403

300

During 2019-20 $401 of inventory held for sale was recognised as an expense (2019:

$490). All inventories are current assets.

Inventories held for resale by the museum store are valued at the lower of cost and net realisable value.

Inventories acquired at no cost or nominal consideration are initially measured at current replacement cost at the date of acquisition.

6C: Other non-financial assets

2020

$'000

2019

$'000

Prepayments

658

380

Total other non-financial assets

658

380

No indications of impairment were found for other non-financial assets. All other non- financial assets are current assets.

7. Payables

7A: Suppliers

2020

$'000

2019

$'000

Trade creditors and accruals

1,606

3,314

Total suppliers

1,606

3,314

All suppliers are expected to be settled within 12 months.

7B: Other payables

2020

$'000

2019

$'000

Salaries and wages

190

99

Superannuation

0

77

Deferred revenue

1,410

1,346

Other

255

452

Total other payables

1,855

1,974

All other payables are expected to be settled within 12 months.

Deferred revenue relates to operating lease payments received in advance and contracts

assessed under AASB15 (see accompanying notes 4A and 4C).

Accounting Policy

All financial liabilities are classified as other financial liabilities.

Financial liabilities at amortised cost

Financial liabilities, including borrowing costs, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest method.

Suppliers and other payables are recognised at their amortised cost, being the amounts at which the liabilities will be settled. Liabilities are recognised to the extent that the goods and services have been received and irrespective of having been invoiced.

Revenue received is reported as deferred revenue, until such time as recognition as revenue is allowed under the relevant accounting standard. This disclosure should be read in conjunction with the accompanying note 4.

8. Interest bearing liabilities

2020

$'000

2019

$'000

Leases

Finance leases1

0

22

Total leases

0

22

1 The Museum has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

Accounting Policy

Refer Overview section for accounting policy on leases.

9. Provisions

9A: Employee provisions

2020

$'000

2019

$'000

Leave

3,248

3,459

Total employee provisions

3,248

3,459

Employee provisions expected to be settled:

No more than 12 months

1,316

1,378

More than 12 months

1,932

2,081

Total employee provisions

3,248

3,459

Accounting Policy

Liabilities for ‘short-term’ employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts.

Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the museum’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The non-current portion of the liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at 30 June 2020. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and redundancy

Provision is made for separation and redundancy benefit payments. The museum recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out terminations (2020: nil; 2019: nil).

Superannuation

The museum’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government. The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

The museum makes employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The museum accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June 2019 represented outstanding contributions.

2020

$'000

2019

$'000

9B: Provision for makegood obligations

Provision for makegood obligations

78

78

Total other provisions

78

78

Provision for makegood obligations to be settled in

More than 12 months

78

78

Total provision for makegood obligations

78

78

The museum has one makegood obligation relating to the installation of public art works.

10. Related party disclosures

Related party relationships

The museum is an Australian Government controlled entity. Related parties to the museum are the Director, Key Management Personnel including Councillors, the Portfolio Minister and Senior Executives, and other Australian Government entities.

Transactions with related parties

The museum’s related party transactions during the financial year were nil (2019: nil).

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note.

11. Key management personnel remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the museum, directly or indirectly. The museum has determined the key management personnel to be the museum’s Councillors, the Director and CEO, and all members of the museum’s Executive.

2020

$

2019

$

Short-term employee benefits

Salary

1,594,155

1,450,826

Performance bonus

92,221

50,608

Other short-term benefits

152,617

125,907

Total short-term employee benefits

1,838,993

1,627,341

Post-employment benefits

Superannuation

238,210

207,766

Total post-employment benefits

238,210

207,766

Other long-term employee benefits

Long service leave

45,827

38,773

Total other long-term employee benefits

45,827

38,773

Termination Benefits

127,265

0

Total Termination Benefits

127,265

0

Total senior executive remuneration expenses

2,250,295

1,873,880

The total number of key management personnel included in the above table is 20 including 12 Councillors (2019: 19 including 12 Councillors). One Councillor's term ceased during the year and two new Councillors were appointed.

The above key management personnel remuneration excludes the remuneration and

other benefits of the portfolio minister. The portfolio minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the museum.

12. Contingent liabilities

At 30 June 2020 the museum had one unquantifiable contingent liability in respect of legal action commenced against it and multiple other parties in the United States of America (the action). The action relates to damage to a submersible vehicle while in transit to the museum (the event). It is not possible to estimate the amount of any eventual payments that may be required in relation to the event. The museum holds current insurance policies in relation to the event. Those policies have reimbursed legal and other expenses incurred to date by the museum in defending the action and are available in the event that any potential damages are incurred.

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

13. Aggregate assets and liabilities

2020

$'000

2019

$'000

13A: Aggregate Assets and Liabilities

Assets expected to be recovered in:

No more than 12 months

27,699

27,914

More than 12 months

243,177

243,996

Total assets

270,876

271,910

Liabilities expected to be settled in:

No more than 12 months

4,777

6,688

More than 12 months

2,010

2,159

Total liabilities

6,787

8,847

14. The Australian National Maritime Museum Foundation

The Australian National Maritime Museum Foundation is a Company Limited by Guarantee and is controlled by the Council of the Australian National Maritime Museum.

The Foundation’s objectives are to create a capital fund, through gifts, bequests and fundraising activities, for the purposes of:

  • Acquiring major additional items or collections of items to develop the National Maritime Collection;
  • Conserving the National Maritime Collection; and
  • Other activities which enhance the National Maritime Collection.

The financial position of the Foundation is consolidated into the Australian National Maritime Museum and is as follows:

2020

$'000

2019

$'000

Opening balance at 1 July

1,108

1,037

Revenues: Interest

0

6

Revenues: Donations

234

168

1,342

1,211

Less Expenses: Suppliers

6

4

Contribution to Museum collection

0

99

Closing Balance at 30 June

1,336

1,108

Represented by:

Cash at bank

1,339

1,113

Receivables

1

0

Payables

-4

-5

1,336

1,108

15. Assets held in trust

The museum has established a number of trust accounts which are detailed below.

Gifts and moneys received for specified purposes are placed in separate bank accounts and expended on those purposes in accordance with the trust terms. These moneys are not available for other purposes of the museum and not recognised in the financial statements.

2020

$'000

2019

$'000

15A: USA Bicentennial Gift Fund

A gift was received to develop and maintain the USA Gallery at the museum and upon completion of the fitout, the assets were transferred to the museum. The residual of the gift is held in trust and the financial position of the Fund is as follows:

Opening balance as at 1 July

3,666

4,251

Receipts: Distributions/Interest

66

109

3,732

4,360

Other expenses

736

694

Closing balance at 30 June

2,996

3,666

Represented by:

Cash at bank

3,968

3,883

Distributions/Interest receivable

4

23

Payable to the museum

-976

-240

2,996

3,666

15B: NZ Bicentennial Gift Fund

2020

$'000

2019

$'000

A fund was created in respect of the yacht Akarana.

The financial position of the Fund is as follows:

Opening balance at 1 July

94

92

Receipts: Interest

2

2

Closing balance at 30 June

96

94

Represented by Investment

96

94

2020

$'000

2019

$'000

15C: Louis Vuitton Fund

A fund was created to set up the Louis Vuitton Collection and for the acquisition of materials relating to the maritime association between France and Australia.

The financial position of the Fund is as follows:

Opening balance at 1 July

27

26

Receipts: Interest

1

1

Closing balance at 30 June

28

27

Represented by Investment

28

27

16. Net cash appropriation arrangements

2020

$'000

2019

$'000

Total comprehensive income/(loss) less

depreciation/amortisation expenses previously funded through

revenue appropriation

854

886

Plus: Depreciation previously funded through revenue

appropriation

-2,981

-2,312

Total comprehensive income/(loss) as per the Statement of

Comprehensive Income

-2,127

-1,426

The museum receives a separate Collection Development Acquisition Budget (CDAB) provided through an equity appropriation to fund heritage and cultural assets.